New poll shows skepticism for new severance tax

A poll released Thursday by the Ohio Petroleum Council shows that 76 percent of Ohio voters believe increasing the severance tax on the oil and gas industry could negatively impact the state’s economy and curb energy development here.

The poll, conducted by telephone at the end of March, surveyed 605 registered voters throughout the state. Its margin of error is plus or minus 4 percentage points.

According to voters polled, 69 percent agree that increasing the severance tax could eliminate jobs in the oil and gas industry and other economic sectors, while 68 percent believe an increased severance tax could slow oil and natural-gas development.

The S/tatehouse is considering whether to raise the severance tax on oil and gas as it debates the finer points of Gov. John Kasich’s state budget proposal. Kasich has pushed the tax, saying that all of Ohio should benefit from the shale gas boom under way here.

Last year, about 1,300 individuals or businesses filed severance taxes, according to the Ohio Department of Taxation, with 984 focused on oil or natural gas. Under current rates, filers pay 10 cents per barrel of oil and 2.5 cents per thousand cubic feet of natural gas produced.

Under the proposal, horizontal wells would be taxed at a rate of 1 percent for gas and 4 percent for the oil, natural gas liquids and condensate those wells produce.

Both sides of the aisle in Columbus have been skeptical about the proposal, fearing that it would discourage operators from continuing to develop business here, while proponents of the tax claim other states charge far-higher rates.

The OPC also found that 77 percent of Ohioans feel a higher severance tax could hurt consumers of gasoline and home-heating fuels. Last year, the state collected more than $10.2 million in severance taxes.

The OPC is a division of the American Petroleum Institute, which represents more than 500 oil- and gas-related business entities. In 2012, according to the Center for Responsive Politics, API spent more than $7.3 million lobbying on the industry’s behalf across the country.